Navigating the legal system can be complex and stressful. Many people make the mistake of taking legal action without first researching the process they’re about to undertake. For example, if you plan on filing for bankruptcy in a Georgia court this year, it is in your best interests to learn as much as you can about the program you choose so that you will understand the various legal terms and phrases you hear during the process and can make informed decisions.
This is not to say that you must know every vocabulary term associated with bankruptcy. There are support resources available, such as a bankruptcy law attorney, who can clarify word meanings and state laws for you during your case.
Words you might hear during the bankruptcy process
Following is a list of terms or phrases along with a basic definition of each, which might be relevant to your case if you file for bankruptcy in Georgia:
- Automatic stay: Court injunction that prohibits anyone from suing you or trying to collect a debt while you’re undergoing bankruptcy.
- Contingent claim: A debt you might owe as a cosigner on a loan if the person you signed for failed to pay off the loan.
- Dischargeable debt: Liabilities removed through the bankruptcy process.
- Exempt property: Property you may keep when assets go through liquidation for bankruptcy.
- Liquidation: A bankruptcy process where the court sells assets and uses the proceeds to pay back creditors.
There are many more bankruptcy terms associated with Chapter 7, Chapter 13, Chapter 11 and other programs. If you encounter a word or phrase you do not understand, it is always best to seek clarification because lack of knowledge could cause you to make mistakes, which might delay proceedings.
How to know which program best fits your needs
While many bankruptcy terms intersect across various programs, some are specific to one type of bankruptcy but not another. Determining which program best fits your needs is one of the first steps to take after deciding to file a petition for debt relief. Each program has its own eligibility requirements, which you must be able to meet to qualify for an application.
If you’re unsure about terminology or don’t know which bankruptcy option to choose, you can seek guidance on the matter. Other factors also help determine which program is best in your case, such as whether you have filed for a specific type of bankruptcy within the past 10 years. Once you choose a program, you can begin the application process.